Business model shifts due to COVID19

How businesses are redefining themselves to adapt

The current pandemic #COVID19 crisis has impacted the world in myriad ways, and while some businesses are struggling to keep afloat, many others are quickly adapting their operations or spawning new business models within their ecosystems to drive value for their customers and shareholders.

The current global health crisis and resulting macroeconomic and market turmoil have created an environment that is not conducive for companies who are not agile enough to rethink and redefine their business models and current ways of working.

Coupled with the strength of their past financial success and quick strategic pivoting given the market conditions, there are a few industries and businesses who’ve come ahead amid this recessionary environment; here are the resulting trends that followed —

#1 Manufacturers are shifting to produce face masks & ventilators

Vehicle manufacturers such as Tesla, Ford, GM and Health companies such as GE are re-purposing their factories to produce N95 masks, face shields, hospital gowns or ventilators for healthcare workers.

Apple has also joined the fray to produce and ship face shields.

#2 Heath-tech startups expand scope to include treatments and testing for COVID19 pandemic

Companies such as Genomics health technology startup Color , Alphabet’s Verily and Cue Health are doing their part to address the global COVID-19 pandemic by expanding their testing efforts, especially for front-line and essential workers. This includes onsite clinical test administration, lab transportation and results reporting with patient’s physicians, as well as actions around post-test workflow.

#3 Food delivering companies are expanding beyond food to deliver essential supplies

DoorDash is expanding beyond food to also deliver from convenience stores to provide easy access to household essentials like toilet paper, cleaning supplies and over-the-counter medicine, as well as hot and cold foods, drinks, snacks and more. Walgreens announced an expanded partnership with Postmates to deliver from over 7,000 stores.

#4 Contactless Online Grocery Delivery

COVID19 has driven the download of grocery delivery apps to record surge. Orders are being delivered to your doorstep through a non-contact (contactless), drop-off option or they can be picked up.

#5 Local stores & SMBs shift the way they operate

Small local businesses have been forced to change how they operate. Many of these dine-in restaurants and cafes who weren’t listed on any food delivery service are either onboarding themselves into these aggregation service providers (Uber, Doordash, Skip the Dishes, GrubHub etc.) or in many cases creating their own makeshift delivery operations for the first time, partly to eliminate the commission that delivery services charge on these transactions.

Local businesses are also innovating themselves by creating meal-kits or even alcohol-kits that patrons can purchase through their website and put together (cook or bartend) from the comfort of their own homes.

Small businesses, be they restaurants, cafes, gyms or workout studios are quickly shifting to promoting gift cards that patrons can buy now for later use during non-quarantine times. This is one strategy that will definitely help in some way to keep these businesses afloat as they’re forced to shut-down their brick&mortar store operations and as people continue to isolate themselves at home.

One critical strategy for local vendors and SMBs has been to leverage the power of social media to their advantage in these times. From fitness studios offering live workout sessions everyday on Instagram/Youtube/Facebook to Yoga studios offering paid online videos, workshops/meditation classes, every physical activity business out there is leveraging digital capabilities to stay relevant in the minds of their customers.

#6 AI in the times of COVID19

AI and Machine learning based companies are leveraging the power of data, quick analysis, super forecasting and projections to —

• create concise, deep, contextual insights (from text analysis on various large dynamic datasets, news articles, other information on the web)
• detect spam/ fake news
• automatically measure people’s temperature in public places
• diagnose COVID-19 infections from chest x-ray scans
• predict the inception & spread of the virus (BlueDot) — when, how & where
• speed up drug research
• determine which patients need hospitalization
• and many more!

Palantir, silicon valley’s favorite data intelligence company is providing COVID-19 tracking software to CDC and NHS to enable disparate data to be integrated, cleaned, and harmonised in order to develop the single source of truth that will support decision-making.

#7 Banking sector is quickening it’s pace to go digital

Banks and Financial institutions have seen a record rise in the number of calls to the support centers, either to -

• move their investments to cash given the bearish fluctuating stock market or update their investment risk profile to a more conservative
• to check if they can defer their payments on mortgages, credit cards, installment loans, and auto loans for the duration of the pandemic
• ensure their credit scores are not impacted by deferred payments
• request waiving certain fees, like stop payment fees and ATM statement fees
• get additional support via personal loans to account for lost employment, a major disruption in their business or unique family circumstances
• re-negotiate credit terms or reduce credit card charges to help them sail through this crisis.

For commercial and small business clients, financial organizations are working with their clients to provide relief by enabling payment deferral, temporary limit increases where needed, waiving setup fees for business client enrollment in electronic cash management and remote cheque processing solutions.

There has been a weighted shift to digital e-signatures as compared to wet signatures required whilst signing documents. Banks and financial institutions are directing clients to use more self-serve capabilities for withdrawals, auto-switching investments and other everyday banking services, rather than visiting the branch or having face to face interactions with front line advisors.

#8 Events without Borders

Since conferences (SXSW, Collision, SaaStr and many others), large and small events have been postponed indefinitely or cancelled altogether, there has been a rise in online events over Skype and Zoom. Hence many event aggregation companies such as EventBrite, In Real Life or even Facebook Events are shifting from focusing on physical events to improving the experience around online events.

#9 Rise of Data aggregation and insights service

One of the most important needs in any kind of local or global crisis is access to the right information. Given there are multiple sources of truth in today’s ever expanding world, which stats and “to-do” lists do you heed?

Facebook launched ‘Community Help’ for COVID-19, which allows local community members — including Facebook Pages used by businesses — to both offer aid and request assistance.

Nextdoor has also added a Coronavirus Resource Center to help local business owners get updated news, information and actionable business advice in one spot. The company previously updated its app to include a Help Map for neighbors offering to help one another or in need of help themselves.

#10 Micro-mobility companies pivot to drive gig economy

Micro-mobility startups (electric scooties, e-bikes and such) are turning their efforts to gig economy workers delivering food. Others, like shared electric moped service Revel, are focusing on healthcare workers.

#11 Ride hailing businesses are partnering with grocery supermarkets

Traditional Ride Hailing companies such as Uber and Lyft are partnering up with grocery chains to supply groceries, meals and medical supplies in US, India and other parts of the world.

#12 The rise of Tele-Health

Staying home isolated or quarantined might mean you don’t have the usual access to your local physician, dentist or pharmacy. Worse still, if you’re exhibiting COVID type symptoms, it might be advisable for you to contact your local health authorities first before walking into a medical center or hospital. Hence the rise of online health consultation providers such as Maple, Kry, Babylon and many others has provided a much required respite for people the world over by providing virtual doctor visits and health assessments.

Telehealth regulates the unprecedented surge in demand for medical consultations by triaging cases right at the root, minimizing delays in getting help and providing pointed guidance on the next course of action.

#14 Advent of self-reporting COVID19 tracking apps

Self-reporting COVID19 tracking apps are doing a good job to provide a better view of the actual number of confirmed affected people within a given city, region or country. There’s Pinterest with a mobile app and a host of other crowd sourced apps such as Covid Near You that are trying to complete the picture that WHO and Health care organizations are not able to provide.

#15 Open sourced community Projects

Gift Card aggregation platforms have sprung up to save their local restaurans and cafes pioneered by SaveOurFaves. Virtual Farmer’s Markets are offering their wares digitally within specific localities.

#13 Rise of services to connect laid-off employees with prospective employers

A ton of community based initiatives have sprung up to address the rising layoffs and furloughs happening from employers who’ve had to unfortunately cut down their staff or implement pay cuts to keep afloat in this economy.

The Layoff network, Silver Lining, a layoff tracker, a talent network or the help list are all initiatives or startups that are helping laid-off employees connect with prospective employers or maintaining lists of companies that’re actively hiring.

As an individual, How can you support your local community?

Here are some things you can do -

• Buy gift cards from local businesses for online or later use
• Donate to fundraisers to help support businesses
• Shop from a business that remains open by way of pickup or delivery
• Sign up for services such as DeliverEase, The Good Neighbour Project, My Shoperon & LendAHand that match volunteers with people in need (seniors, people with disabilities or vulnerable groups) to deliver essential goods & supplies or to run errands.
• Donate to Food banks if you can

As a Business, lean into the cultural shift and pivot

• Customers would likely ask for price cuts for services, and contracts would not close at the last minute.
• Signs are beginning to emerge that investors are losing appetite to invest in emerging startups in the current scenario. Many investors are moving away from thinking about ‘growth at all costs’ to ‘reasonable growth with a path to profitability.’
• Through the lock-down, most businesses could see revenues going down to almost zero and even post that, the recovery curve may be a ‘U’ shaped one vs a ‘V’ shaped one.
• You need to continue to drive customer & shareholder value to survive this crisis with a combination of business models pivots, cost reduction, hyper focus on top re-prioritized initiatives and slowdown of non-essential projects.

Ideally, a healthy cash position and balance sheet is ideal — that’d enable businesses to navigate unanticipated challenges such as the global pandemic now before us, while preserving strategic optionality for the future.